Dr. Leonard Schleifer, CEO of Regeneron Pharmaceuticals, made $42 million in total compensation last year, the most of any healthcare executive. But those companies also generally have well-paid employees, such as doctors, scientists and nurses.
“Comparing a highly technical healthcare organization with companies in other industries is going to make healthcare companies look like they are treating their employees really well,” said David Bjork, a managing director of consulting firm Integrated Healthcare Strategies.
But that may not be the case for publicly traded healthcare organizations that have many employees in low-paying jobs, such as those who work in post-acute care. Home health workers have been fighting for a $15 an hour minimum wage this year. Seeing a CEO who makes several hundred times what they make could bolster their case.
“Once you take into account those different levels of service outside of the acute-care setting, it could make the (pay) ratio even steeper,” said Steve Sullivan, a principal at executive compensation firm Pearl Meyer & Partners.
The health insurance industry has also been criticized for excessive pay. The CEOs of Aetna, Anthem, Centene Corp., Cigna Corp., Health Net and UnitedHealth Group earned almost $100 million combined last year, an average of about $16.6 million per executive.
Aetna CEO Mark Bertolini raised his company's wage floor to $16 an hour this year to combat internal income inequality. The insurance industry has broadly defended its corporate pay practices.
“CEO compensation is not at all a factor in the rising cost of healthcare that folks are facing,” said Clare Krusing, spokeswoman for America's Health Insurance Plans.
Healthcare CEOs are among the highest-paid in any industry. The top brass of healthcare companies in the S&P 500 earned $13.5 million in cash and stock on average in 2014, the most of eight sectors studied by executive compensation firm Equilar.
Some of the loudest uproar over lavish healthcare executive pay was aimed at John Hammergren, CEO of drug distribution company McKesson Corp. Hammergren made $24.8 million in the most recent fiscal year and more than $102 million in the past three years combined. Shareholders condemned the compensation package in 2014, which led the company to reduce Hammergren's retirement structure.